How to Optimize Free Trials for Your Software Company

May 30, 2017

In this day and age, software companies are pretty much expected to offer some sort of free trial: so many companies offer one thinking that refusing to do so can lead potential customers to your competitors (unless, of course, you have a completely one-of-a-kind product).

But it isn’t as simple as offering a free trial and—bam!—customers appear.

Free trials are fantastic because they lower the barrier to entry for your product: customers will feel better about trying your software, knowing that they have time to make a fully informed decision before parting with their hard-earned money.

Trial Length: Does a 7-Day, 14-Day, or 30-Day Trial Work Better?

There are a few questions that you have to ask about your business before choosing the length of time that a potential customer can use your product for free. They are the following:

Can the business afford the trial period?

Offering a free trial can be a Catch-22. You need more paying customers, but you have to offer your product for free to get them. Take a close look at your business’s finances to determine the length of time that it can afford not to make any money on the software. Assume that you will convert 15 to 20 percent (the industry average) of free trial users to paying customers. The answer to this question will determine whether your company is even able to offer a 7-day, 14-day, or 30-day trial.

You should also consider the customer acquisition cost of the trial period: a longer trial period will equate to a longer sales cycle, which costs more money. Make sure that you have the sales team and resources to handle a 30-day vs. a 7-day free trial.

Will the customer be able to figure out the software within the allotted time?

If a customer isn’t able to get a handle on your software’s features and benefits before the trial trial period is done, odds are that they won’t sign up; they won’t feel like they have enough information to make a decision.

Generally speaking, more complicated software requires a longer free trial period, for the simple reason that the potential customer will have more features and functionality to wade through. They’ll need more time to learn it all. Conversely, simpler software requires less time. (This is part of the reason why Adobe offers a 30-day free trial for Photoshop, for example.)

Once you know the minimum length of time a customer needs to understand your product and you’ve determined that your business can offer it, now it’s time to hash out the benefits and drawbacks of each trial period length.

Long trial periods, like 30-day free trials, will typically garner more interest and more users—and therefore more leads. People like the idea of having a lot of time to try something out. The flip side to this is that not all of these leads will become active users: most people don’t actually spend 30 days trialling a product, even if they think they need that amount of time, and a fair amount may forget about the trial entirely.

A shorter trial period (14-day or, especially, 7-day) motivates the user to actually demo the software, since they know they have a very limited time to do so. As a result, shorter trial periods garner more conversions from the leads they do get. Unfortunately, you lose the people who didn’t come to a decision within 7 to 14 days.

Depending on your business, it may be more important to you to have a higher conversion rate of a smaller pool of people. Or it may be more important to access a larger pool of people, even if the conversion rate is somewhat lower.

If you’re not sure how long to offer your trial period, consider options like A/B testing or extending the length of your trial to users who are still on the fence. Measure the response to get a better understanding of how the free trial length affects your conversion rate.

Trial Functionality: Should You Offer Everything at Once?

If you’ve already decided to offer a free trial and you know the length of time that it will last, the next thing to consider is the functionality of your software during the trial period.

The benefits to offering a fully functional free trial are numerous. Customers get to experience how great your product is (thereby selling themselves on it). They invest time and energy learning and using the software, making them more likely to purchase it. And you can get valuable feedback and insight into your product, even from users who don’t end up purchasing it.

But these benefits come with a few drawbacks. For every couple of honest potential customers who just want to make an educated decision, there will be one who wants to cheat the system by signing up with no intention of ever paying. In addition, there is the concern that competitors will use the free trial in order to scope out your software’s design and features.

The direction your company chooses to go should depend on your priorities and on the type of software you sell. If you have developed software that is more “one-time use,” a partially functional free trial might be your best bet. This will decrease the likelihood that someone will use your free trial to complete a project without ever paying you. On the other hand, if your software is designed for more prolonged use, you should feel free to go with a fully functional free trial. (Few people are going to try to scam a customer relationship management product like Salesforce, for example.)

A free trial can have a major impact on your software company, and it’s not a project that should be undertaken without some serious thought. These are just a few things to consider before adding a free trial to your sales operations.